Weakest September in two decades as UK new car sales drop more than 4%

Jill Petzinger
·Germany Correspondent, Yahoo Finance UK
·2 min read
A car sales person wearing PPE (personal protective equipment) including a face mask and gloves as a precautionary measure against COVID-19, walks past vechiles parked on the forecourt of a recently re-opened Vauxhall car dealership in north London on June 4, 2020, as lockdown restrictions are eased during the noel coronavirus COVID-19 pandemic. - Car showrooms in England reopened this week as the UK government eased COVID-19 lockdown measures that have slammed the brakes on the industry. (Photo by JUSTIN TALLIS / AFP) (Photo by JUSTIN TALLIS/AFP via Getty Images)
A sales person at a Vauxhall car dealership in north London on June 4, 2020, the week when showrooms in England were allowed to reopen post COVID-19 lockdown. Photo: Justin Tallis AFP via Getty Images

New car registrations in the UK dropped by 4.4% in September, compared to the same month last year, as the coronavirus pandemic continues to hurt demand.

According to the latest data from the Society of Motor Manufacturers and Traders, last month’s 328,041 new registrations marked the weakest September in 20 years, and a nearly 16% drop on the 10-year average of 390,000 for the month.

September is traditionally one of the two best months in the year for sales, as it is when licence plates change.

“During a torrid year, the automotive industry has demonstrated incredible resilience, but this is not a recovery,” said SMMT chief executive Mike Hawes in a statement. “Despite the boost of a new registration plate, new model introductions and attractive offers, this is still the poorest September since the two-plate system was introduced in 1999.”

On the upside, battery electric and plug-in hybrid car sales grew to account for more than one in 10 registrations, the SMMT said, thanks to the growth in choice of new models. Demand for battery electric vehicles (BEVs) jumped by 184% compared with September last year, and accounted for one-third of all BEV registrations in 2020.

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The SMMT said that the UK car industry is looking at over £21bn ($27bn) in lost revenue overall in 2020.

“Unless the pandemic is controlled and economy-wide consumer and business confidence rebuilt, the short-term future looks very challenging indeed,” Hawes said today.

August is normally a weak month for sales, and this year the situation was exacerbated by the pandemic, with just 88,000 new cars registered in the UK, a 5.8% drop from the same month 2019.

UK car sales had experienced 11% surge in registrations in July, after showrooms emerged from the sweeping coronavirus lockdown, but the leap in sales point to a release in pent-up demand that has since fizzled.

In September, British and European automotive industry leaders issued a joint letter urging Brexit negotiators to reach a free-trade deal, or risk “severe repercussions” for the sector, which employs 14.6 million in the EU and UK.

“With buyers being understandably cautious, and ongoing supply issues with many manufacturers struggling to get back up to speed following Covid-19 factory lockdowns, the new car market is now likely to remain fragile for the rest of 2020,” said Alex Buttle, director of Motorway.co.uk.